Career focus: insolvency and corporate recovery

To be a success in the area of insolvency and corporate recovery you need to understand how numbers equal life, so how do you get in to it and what can you get out of it? Beth Holmes reports

The past few years of economic turmoil have not begged the question of whether companies will survive the onslaught of credit crunch but rather how many will fail.

But the world of corporate recovery and insolvency (CR&I) is not all doom and gloom, and accountants who choose to specialise in this highly emotive arena are often challenged and rewarded in equal measure. For every company that fails completely there is one that can be salvaged and put on the path to success again. And at the end of the day, the numbers – and therefore the people behind those numbers – are what determine whether a business can stay the course or fold.

Scott Lavery, manager at international recruiters Badenoch & Clark explains the twofold nature of the work: ‘It is split,’ he says, ‘between the formal, process driven work of insolvency, and the more advice-based nature of restructuring. Insolvency is necessarily process heavy, breaking down companies using methods that are of the biggest benefit to all.

‘Restructuring work, on the other hand, can be much more fluid. The options open are wider, and the advice given can vary greatly from situation to situation. Looking at the best ways to manage working capital, re-engineering ways of doing business, examining existing processes – all of these provide the recovery specialist with a wide scope of activity.’

‘Insolvency specialists will typically work with collapsed or distressed businesses, supporting them through a formal administration and bankruptcy process, or, helping to turn them around and become profitable,’ continues Kathryn Swan, director at Hays Senior Finance.

In addition to a traditional insolvency skills base, established professionals may also have gained skills in transaction services, financial modelling and due diligence. Within professionals services insolvency specialists are recognised as being experts in business valuation, business trading and people management.

Skills needed

As far as the type of person who should go into CR&I, Elaine Knopf, a corporate recovery and insolvency supervisor at PKF Accountants & business advisers, says that an individual’s skills set needs to be broad and comprehensive.

‘Qualified accountants will already be numerate and able to read figures, but you should be able to think logically about what the figures mean (about how numbers equal life) and how they sit in a context.

‘Report-writing skills will also be important even if you don’t get involved in writing analytical reports, and writing skills in general are a must.’

‘People skills are essential,’ she continues, ‘and sometimes you need quite a tough skin. Another key skill is being able to manage your time dealing with a number of cases, and being able to prioritise.’

‘Lastly, CR&I can be heavily legal - it’s governed by a number of laws so it’s something you will have to deal with. Reading the various acts and getting comfortable with the statutory side is essential.’

Lavery presses the importance of communication skills, as the work is often done against the backdrop of a very stressful situation. ‘Bringing client facing skills with you will be a big benefit – that means communication skills, influencing abilities and a flair for concise analysis,’ he says. ‘Given the degree of client contact, it’s really this side of the role that brings the most opportunity for development.’

Why bother?

So far, so arduous; the work is hard, complex and sometimes upsetting. So what is the attraction?

Having always worked in audit, Knopf was attracted to CR&I as it’s a more commercial area. ‘[It’s] not backward looking in the way audit often is, and everything happens in real time - advice and choices made actually count and can have a huge impact,’ she explains. ‘I enjoyed the client-facing aspects of audit, and that I could see lots of different kinds of businesses, which CR&I also offers.’ 

And ironically, it is the difficult emotional side – ‘I have been asked “how am I going to feed my children?”,’ says Knopf – that is also one of the most rewarding elements of the work.

‘The key thing is to remember you’re doing something positive in the system. Trading and selling companies in administration can save jobs, although creditors sometimes lose out, and realising assets does mean that there can be distributions made to creditors who are owed money.’

That said, ‘You do occasionally have to remind yourself it wasn’t your fault, when you get angry phone call directed your way, but the business failure was down to bad management, or the economic circumstances, and it’s your job to provide information or carry out tasks in as an efficient and sympathetic way as possible.’

Insolvency practitioners often augment their practical skills with a professional qualification. The two key qualifications for specialists in this area are the JIEB (Joint Insolvency Examinations Board exam) and the CPI (Certificate of Proficiency in Insolvency.) Both are useful but ultimately the JIEB qualification is the one you will need if you want to progress to being able to take on your own appointments. ‘Within professional services some larger firms will require candidates to be qualified accountants,’ adds Swan.

As mentioned at the start of this article, unlike many other careers, opportunities for insolvency and recovery specialists has positively boomed over the past few years. ‘Logic dictates that as more companies struggle, there is more demand for insolvency and recovery experts,’ says Lavery.

The opportunities in CR&I can take people in a number of different directions. The nature of the work means there is often scope to work on high profile projects; experience that can be very impressive to potential in-house employers so accountants can move in-house to an industry finance role.

‘If you stay in practice, you can go all the way to partner,’ says Knopf. ‘Being a qualified accountant really helps.’




"Insolvency specialists will typically work with collapsed or distressed businesses, supporting them through a formal administration and bankruptcy process, or, helping to turn them around and become profitable"